Worst economy since Herbert Hoover?

[Plan B]

That's what John Kerry said in 2004, but George Will disagrees. In today's column Will points out that:

"Since the Bush tax cuts went into effect in 2003, the economic growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and '90s (3.3) . Today's unemployment rate (4.6 percent) is lower than the average for the '90s (5.8) - lower, in fact, than the average for the last 40 years (6.0)."

And that's after the 9/11 trillion dollar hit and the recession which started with the internet bubble bursting in 2000.

I'm inclined to agree with Will on this.

[Blaster Master]

Link to the column?I'm not convinced the of relevance of the numbers you provided. Are those recent numbers, or numbers from about the time Kerry said that? Why are all the numbers only compared to the 80's and 90's and not to the great depression? Is this article even related to Kerry's statement?

I'm also curious with what your proposed debate is. Are you just curious if Kerry was talking out of thin air? I'd tend to agree that the economy has approached the great depression, and its a gross exaggeration to say so. If those numbers were similar then, I'd think you'd have a hard time finding anyone that would patently disagree with you that the economy isn't better. Are you proposing that Bush's tax cut is responsible for the booming economy? Chances are, you'll find some people who will disagree with the proposed cause.

To answer both: Yes, comparing the modern economy to the great depression is ludicrous. I do tend to believe that tax cuts help to stimulate the economy, but I'm not going to give the credit to any one or party in particular. I'm humble enough to realize there's plenty of other factors at work besides, and the tax cut is probably one of the lesser ones.

[Blaster Master]

Today's unemployment rate (4.6 percent) is lower than the average for the '90s (5.8) - lower, in fact, than the average for the last 40 years (6.0)."
Oh, I forgot to respond to this. A lower unemployment rate isn't always a good thing. At some point, it starts to become a work shortage, which can be bad nearly as bad as too many unemployed (inflated wages, high turn around, underqualified employees, etc.). Now, IANA Economist but, IIRC that crossover point from worker surplus to worker shortage is somewhere around the 4-5% area. I'm sure someone more knowledgable on the subject can correct that undoubtedly incorrect number.

[Voyager]

That's what John Kerry said in 2004, but George Will disagrees. In today's column Will points out that:

"Since the Bush tax cuts went into effect in 2003, the economic growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and '90s (3.3) . Today's unemployment rate (4.6 percent) is lower than the average for the '90s (5.8) - lower, in fact, than the average for the last 40 years (6.0)."

And that's after the 9/11 trillion dollar hit and the recession which started with the internet bubble bursting in 2000.

I'm inclined to agree with Will on this.
I'm really sick and tired of the Republicans spouting this stuff to try to counter the fact that most people in the country don't think the economy is so hot, and for good reason. "Worst since Hoover" is clearly hyperbole, since the Depression didn't end in early 1933.

Unemployment may or may not actually be lower - we don't know how many are out of the job market. Plus there is a lot of underemployment, as people who have been laid off have only found lower paying jobs. However, wages have gone nowhere for the past six years, while productivity has improved and profits have dramatically improved. Worse, the Republicans do not seem to think this is a problem - they only think increasing the minimum wage is a problem.

If you are well off, if you make money from dividends or from the market, if you have a rare skill that is in demand, then you're in good shape. If you work for a living, not so much.
I'm in good shape personally, but I would love to see more people in good shape. I think the economy would be on a firmer footing, which would be good for everyone.

I read an interesting column, predicting that if the Democrats take over Congress they will pass bills like a reasonable minimum wage hike, allowing the government to negotiate for better drug prices, for funding stem cell research etc. All stuff Republicans hate and the people love. The Republicans will either have to support this stuff or give ammunition for the Dems for the 2008 campaign. It will be fun, and even better for the country than investigations.

[Voyager]

Oh, I forgot to respond to this. A lower unemployment rate isn't always a good thing. At some point, it starts to become a work shortage, which can be bad nearly as bad as too many unemployed (inflated wages, high turn around, underqualified employees, etc.). Now, IANA Economist but, IIRC that crossover point from worker surplus to worker shortage is somewhere around the 4-5% area. I'm sure someone more knowledgable on the subject can correct that undoubtedly incorrect number.
If the unemployment rate were really that low, we'd expect to see upward pressure on wages, which is just not happening. So I have my doubts. I'm not saying anyone is cooking the books - just that there may be a lot of people who have given up.

[Blaster Master]

If the unemployment rate were really that low, we'd expect to see upward pressure on wages, which is just not happening. So I have my doubts. I'm not saying anyone is cooking the books - just that there may be a lot of people who have given up.
The number is naturally going to be inaccurate. For instance, it could be skewed upward by someone who may be out of work, but not particularly interested in getting back into the work force (eg, a guy gets laid off/quits decides to go back to school, one from a working couple quits to be a stay-at-home parent, someone retires early, etc.). This number could be skewed downward by someone who is underemployed.

I'm in the technology field, and personally, I've noticed a general decline in the quality of the people that have been hired and an increase in what they're willing to put up with to keep someone around. I've also seen wages baloon to hire/keep people that don't really deserve those wages. Is this just our company failing at properly weeding out candidates? Is this a result of fewer available skilled workers? I don't know. Still, I have no way of observing unskilled laborers, retail, etc.

[Age Quod Agis]

Link to the column?I believe this is the article Plan B is talking about (http://www.washingtonpost.com/wp-dyn/content/article/2006/10/18/AR2006101801502.html).I'm not convinced the of relevance of the numbers you provided. Are those recent numbers, or numbers from about the time Kerry said that?Recent numbers.Why are all the numbers only compared to the 80's and 90's and not to the great depression?Because the 80s and 90s were decades of economic prosperity. The Great Depression was not. It wouldn't be too convincing to say that today's economy is doing great, and then compare it to the Great Depression.Is this article even related to Kerry's statement?Only insofar as Kerry suggested that the economy was cold, and running colder. Here's the relevant quote from Will's column:"Worst economy since Herbert Hoover," John Kerry said in 2004, while that year's growth (3.9 percent) was adding to America's gross domestic product the equivalent of the GDP of Taiwan (the 19th-largest economy). Nancy Pelosi vows that if Democrats capture Congress they will "jump-start our economy." A "jump-start " is administered to a stalled vehicle. But since the Bush tax cuts went into effect in 2003, the economy's growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and 1990s (3.3). Today's unemployment rate (4.6 percent) is lower than the average for the 1990s (5.8) -- lower, in fact, than the average for the past 40 years (6.0). Some stall.
Yes, comparing the modern economy to the great depression is ludicrous. I do tend to believe that tax cuts help to stimulate the economy, but I'm not going to give the credit to any one or party in particular. I'm humble enough to realize there's plenty of other factors at work besides, and the tax cut is probably one of the lesser ones.I'm with you. I think the economy is in great shape, but I don't think it's necessarily because of anything Bush has done. The economy is a rather large beast that runs where it wants. It goes through cycles regardless of what the President does. The President has less of an effect on the economy than he's typically given credit (or blame) for.A lower unemployment rate isn't always a good thing. At some point, it starts to become a work shortage, which can be bad nearly as bad as too many unemployed (inflated wages, high turn around, underqualified employees, etc.). I'm not an economist either, but a work shortage is much different than a glut of unemployed workers. For one, a work shortage just slows the growth of the economy. A work surplus creates unemployment, poverty, and associated ills. I think most everyone would agree that if given the choice, a work shortage is better.

[Blaster Master]

I'm really sick and tired of the Republicans spouting this stuff to try to counter the fact that most people in the country don't think the economy is so hot...
I'm really sick and tired of the Democrats blaming the Republicans for the supposed poor state of the economy. Don't get me wrong, I'm not a Republican... I'm just as pissed when I see Republicans blame Democrats for stuff too, but can you provide a cite that decidedly says the economy ain't "so hot"? Just because a lot of people in this country think it's bad, doesn't mean it is (ie, argumentum ad populum).

Further, I'm not convinced increasing the minimum wage will do any good. Its my understanding that a higher minimum wage has little to no effect on the poorest's buying power, while thrusting more people into the group of people making minimum wages, while increasing production costs for any company that employs minimum wage laborers, thus passing the cost on to the consumer which essentially cancels out what little extra buying power it granted the poor while having, in effect, created more of them. Regardless, I do not want to hijack the thread and turn it into a minimum wage debate. I'll open a seperate thread if you want to discuss it further.

Can you give us a link to this article about how the Democrats will fix everything when they take over congress? What makes these predictions credible? I'm not inclined to believe these sorts of outlandish predictions, because I've seen them everytime the house or the senate or the presidency, or some combination of the above change hands (to Democrats OR Republicans), and it just seems like they either fix nothing, or its a whole new mess of problems.

[Blaster Master]

I'm not an economist either, but a work shortage is much different than a glut of unemployed workers. For one, a work shortage just slows the growth of the economy. A work surplus creates unemployment, poverty, and associated ills. I think most everyone would agree that if given the choice, a work shortage is better.
Thanks for the link, I just wanted to put the quote in context. FWIW, I do agree a worker shortage is preferable to a worker surplus... I just wanted to put in perspective that having an unemployment rate of 0% is not necessary as desirable as intuition would imply. I was, more or less, hoping I'd spin up an economist to either add to that, or correct me.

[Age Quod Agis]

"Worst since Hoover" is clearly hyperbole, since the Depression didn't end in early 1933. I think George Will's point is that "Worst since Hoover" isn't hyperbole so much as it's inaccurate. The economy was (and is) not bad at all. So saying it's the "Worst since Hoover" isn't just hyperbole, it's false.Unemployment may or may not actually be lower - we don't know how many are out of the job market. Plus there is a lot of underemployment, as people who have been laid off have only found lower paying jobs. Both true. However, both are also true in all economies. I've seen no evidence to indicate that they are more prevalent in this one.However, wages have gone nowhere for the past six years, while productivity has improved and profits have dramatically improved. Will addresses this, too. Here's what he says.It is said that employee compensation has been stagnant. But to tickle that bad news from the statistics you must treat "compensation" as a synonym for wages and then ignore the effect of taxation on individuals' well-being.

Kevin Hassett and Aparna Mathur of the American Enterprise Institute, writing in National Review, say annual wage growth since 2000 has been 0.6 percent, but the annual increase in real hourly compensation, including benefits -- and if you do not include them, why are they called benefits ? -- has been 1.3 percent. And taxes -- particularly those paid by middle-class families with children -- have declined substantially.
If you are well off, if you make money from dividends or from the market, if you have a rare skill that is in demand, then you're in good shape. If you work for a living, not so much.I must admit I'm surprised by your statement that people who make dividends or have rare skills don't "work for a living."

Regardless, Will address this, too:Finally, today's widening income disparities will be partly self-correcting. Granted, income statistics show the increasing disadvantages of persons with education deficits. But that is the market saying -- shouting, really -- "Stay in school!" Over time the voice of the market is rational, credible and therefore a potent instrument for changing behavior.
I read an interesting column, predicting that if the Democrats take over Congress they will pass bills like a reasonable minimum wage hike, allowing the government to negotiate for better drug prices, for funding stem cell research etc. All stuff Republicans hate and the people love.Bush funds stem cell research, and has apparently done so since 2001 (http://www.whitehouse.gov/news/releases/2001/08/20010809-2.html).As a result of private research, more than 60 genetically diverse stem cell lines already exist. They were created from embryos that have already been destroyed, and they have the ability to regenerate themselves indefinitely, creating ongoing opportunities for research. I have concluded that we should allow federal funds to be used for research on these existing stem cell lines, where the life and death decision has already been made.
....
I also believe that great scientific progress can be made through aggressive federal funding of research on umbilical cord placenta, adult and animal stem cells which do not involve the same moral dilemma. This year, your government will spend $250 million on this important research. And the government does negotiate for better drug prices in some areas. As stated by the NY Times (http://www.nytimes.com/2004/10/17/politics/17drug.html?ex=1161489600&en=484934c5bb38956b&ei=5070) (reg. req'd):In asserting that Medicare officials should be able to negotiate with drug companies, the medical association said that other federal agencies, like the Department of Veterans Affairs and the Defense Department, had "negotiated favorable rates on prescription drugs on behalf of their beneficiaries, resulting in very substantial cost savings.''

Moreover, it said, "others delivering medical services under federal health care programs, including physicians, have long been under government-imposed limits on their fees.'' Regardless, you're talking about the new Medicare bill. But the new Medicare bill didn't prevent negotiations on drug prices. The new Medicare bill was implemented by private insurers. The private insurers were responsible for negotiating their own prices with the drug companies. The government was merely prohibited from "interfering" in those negotiations either for the drug companies or insurers.

[Age Quod Agis]

I was, more or less, hoping I'd spin up an economist to either add to that, or correct me.D'oh! Sorry. Hopefully I haven't prevented someone more knowledgable from coming in to correct my uneducated arse.

[BrainGlutton]

I must admit I'm surprised by your statement that people who make dividends or have rare skills don't "work for a living."

That certainly is the case WRT a dividend-drawer or rentier. (Some of those do work, but there is no connection between their work and their dividends.)

[DanBlather]

Saying that something is the "worst since X" isn't comparing it to X, it's comparing it to everything since X. In fact, it clearly means that it is not as bad as X.

[Cheesesteak]

Saying that something is the "worst since X" isn't comparing it to X, it's comparing it to everything since X. In fact, it clearly means that it is not as bad as X.I think the common usage of the phrase intends to compare the current event to X. As in, the current event is almost as bad as X. You can pick it apart grammatically to "prove" it's not equating the two, but it's no accident that so many native English speakers believe it does.

Anyway, did Kerry really believe the economy in 2004 was worse than the economy in late 70's?

[DanBlather]

I think the common usage of the phrase intends to compare the current event to X. As in, the current event is almost as bad as X. You can pick it apart grammatically to "prove" it's not equating the two, but it's no accident that so many native English speakers believe it does.

Anyway, did Kerry really believe the economy in 2004 was worse than the economy in late 70's?I think Kerry is wrong BTW, but I can't see pitting someone as comparing the economy to the Depression when he did no such thing. I have no reason to believe that is what most native English speakers believe, and it is hardly nit picking.

"The Bears lost 24-0 today, their worst lost since 1985" That is saying that in the last 21 years the Bears have not lost by 24 points or more. The loss in '85 could have been by 50 points.

[Cheesesteak]

I think Kerry is wrong BTW, but I can't see pitting someone as comparing the economy to the Depression when he did no such thing. I have no reason to believe that is what most native English speakers believe, and it is hardly nit picking.First off, it's a debate, not a pitting.

Second, Blaster Master, Voyager and AQA all mentioned the Great Depression in their responses to the OP. If today's economy was obviously not being compared to the Great Depression in any way, then none of them would have felt compelled to mention the Depression. That is proof that some English speakers would interpret it as a comparison.

Third, as was mentioned, the Depression didn't end when Hoover left office, it was in full swing for years after that point, so a comparison to the Depression is entirely consistent with the most literal possible meaning of his quote. If he didn't mean to compare it with the Depression, he should have taken a history lesson and picked a date after the Depression ended as his comparison point.

[Voyager]

I think George Will's point is that "Worst since Hoover" isn't hyperbole so much as it's inaccurate. The economy was (and is) not bad at all. So saying it's the "Worst since Hoover" isn't just hyperbole, it's false.Both true. However, both are also true in all economies. I've seen no evidence to indicate that they are more prevalent in this one.Will addresses this, too. Here's what he says.

The only problem is that the increase in benefits is not keeping up with the increase in health care costs. More of the share is going to the employee, and more are being dropped. So the increase is not keeping up with inflation in this sector.

I must admit I'm surprised by your statement that people who make dividends or have rare skills don't "work for a living."

I'm in the rare skills class myself. I wondered about writing that, and, while I put in a lot more than 40 hours a week, I'll take my job over that of one in the masses anyday. So, I'm insulting myself.

Regardless, Will address this, too:
Bush funds stem cell research, and has apparently done so since 2001 (http://www.whitehouse.gov/news/releases/2001/08/20010809-2.html).

The stem cells lines are becoming increasingly useless, and he did veto the measure funding research for which there is some hope. There weren't nearly as many valid lines as he said in any case. Most of the US has stopped falling for this crap.

And the government does negotiate for better drug prices in some areas. As stated by the NY Times (http://www.nytimes.com/2004/10/17/politics/17drug.html?ex=1161489600&en=484934c5bb38956b&ei=5070) (reg. req'd):Regardless, you're talking about the new Medicare bill. But the new Medicare bill didn't prevent negotiations on drug prices. The new Medicare bill was implemented by private insurers. The private insurers were responsible for negotiating their own prices with the drug companies. The government was merely prohibited from "interfering" in those negotiations either for the drug companies or insurers.
I believe the VA does negotiate, and quite well too. However, don't you think it is more efficient if the whole government, which is funding this initiative, did the negotiating instead of a lot of insurers? The bigger you are the better deal you get - assuming you want a good deal for the people, of course.

[Voyager]

I'm really sick and tired of the Democrats blaming the Republicans for the supposed poor state of the economy. Don't get me wrong, I'm not a Republican... I'm just as pissed when I see Republicans blame Democrats for stuff too, but can you provide a cite that decidedly says the economy ain't "so hot"? Just because a lot of people in this country think it's bad, doesn't mean it is (ie, argumentum ad populum).

Well, if Republicans pass tax cuts to make the economy great, and campaign on what they did for the economy, they can't turn around if the polls show the economy isn't hot (in the opinion of the people) and say they had nothing to do with it. And vice versa, of course - this is not a Republican only sin.
My point is not that the economy is absolutely good or bad, but that how it is depends on where you sit. If the majority of voters feel they haven't gotten any benefit from the great economy, the response is not to tell them how great Mr. Rich Man is doing, and then wonder why the response doesn't make them happy. The economy is great from a certain perspective, and stinks from another. They're running into the problem that dollars do not always equal votes.

Further, I'm not convinced increasing the minimum wage will do any good. Its my understanding that a higher minimum wage has little to no effect on the poorest's buying power, while thrusting more people into the group of people making minimum wages, while increasing production costs for any company that employs minimum wage laborers, thus passing the cost on to the consumer which essentially cancels out what little extra buying power it granted the poor while having, in effect, created more of them. Regardless, I do not want to hijack the thread and turn it into a minimum wage debate. I'll open a seperate thread if you want to discuss it further.

That would only be true if prices were directly proportional to wages - and to the minimum wage in particular. If prices did not go up as fast as the minimum wage, then they would do better.

Can you give us a link to this article about how the Democrats will fix everything when they take over congress? What makes these predictions credible? I'm not inclined to believe these sorts of outlandish predictions, because I've seen them everytime the house or the senate or the presidency, or some combination of the above change hands (to Democrats OR Republicans), and it just seems like they either fix nothing, or its a whole new mess of problems.
I'll look it up, but you misunderstand the article. It wasn't about fixing anything - it was all about the political ploy of passing popular legislation to embarass Republican congresspeople and the Administration. It's pure politics, not a recipe for curing our ills - even if some of it will help, imo.

[jshore]

"Since the Bush tax cuts went into effect in 2003, the economic growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and '90s (3.3).

It is a little strange to compare an average growth rate over ten year periods to the growth rate over a period cherry-picked because the economy has done well over that particular interval of time. At the very least, one should compare the growth rate of those decades to the not-yet-complete 2000 decade. After all, if I cherry-pick the best 3 year period from the decades of the 1980s or 1990s, I am betting I get a considerably higher number than 3.5%.

At any rate, a big difference is that during the 1990s, we not only had good economic growth but we used this growth to start to get out of debt. By contrast, the time since Bush took over has been a time as trying to generate economic growth by maxing out our national credit card. I don't think that anyone disputes that deficit spending has a stimulative effect on the economy (at least as long as fed policies and the like keep interest rates low).

Another big difference is that the economic gains of the 1990s were much more evenly distributed, with the poor and middle class gaining considerable ground too. By contrast, the vast majority of gains since 2000 have gone to a very small minority of wealthiest Americans.


And that's after the 9/11 trillion dollar hit and the recession which started with the internet bubble bursting in 2000.

I'm skeptical of this "trillion dollar hit" claim. Sure, I imagine that 9/11 and what followed had some negative impacts on GDP...but I imagine it had positive effects too. Remember that GDP is an imperfect measure and, as such, things like disasters and wars can inflate it as money gets spent rebuilding or manufacturing weapons and so forth.

[gonzomax]

Personal bankruptsies went up 30% in the last 2 years. 2.1 million Americans filed last year. Forclosures are up 25% in the last year. 50 million people are without health insurance. If you are doing well ,you are doing very well. If not it is getting ugly fast.The middleclass that have lost their jobs due to them moving abroad have to completely restart. It is not always easy or possible. if you are too old to learn a new way to make money you are screwed. In many large cities ,unemployment is horrible and they have given up looking.

[Plan B]

It is a little strange to compare an average growth rate over ten year periods to the growth rate over a period cherry-picked because the economy has done well over that particular interval of time. At the very least, one should compare the growth rate of those decades to the not-yet-complete 2000 decade. After all, if I cherry-pick the best 3 year period from the decades of the 1980s or 1990s, I am betting I get a considerably higher number than 3.5%.

At any rate, a big difference is that during the 1990s, we not only had good economic growth but we used this growth to start to get out of debt. By contrast, the time since Bush took over has been a time as trying to generate economic growth by maxing out our national credit card. I don't think that anyone disputes that deficit spending has a stimulative effect on the economy (at least as long as fed policies and the like keep interest rates low).

Another big difference is that the economic gains of the 1990s were much more evenly distributed, with the poor and middle class gaining considerable ground too. By contrast, the vast majority of gains since 2000 have gone to a very small minority of wealthiest Americans.



I'm skeptical of this "trillion dollar hit" claim. Sure, I imagine that 9/11 and what followed had some negative impacts on GDP...but I imagine it had positive effects too. Remember that GDP is an imperfect measure and, as such, things like disasters and wars can inflate it as money gets spent rebuilding or manufacturing weapons and so forth.

Where do I start?

There is no "cherry-picking" here at all. I think that's one term that liberals like to use to discredit results that don't fit their theories. In any event when this decade started Clinton was president, and he stayed president for another year and 20 days. Now if there was something magical about the inauguration that always had impacts on the economy, I'd say let's look at the numbers since 1/20/2001. But that's not the way it works. So Will (and others) chooses to start counting when the Bush tax cuts went into effect. Sounds fair to me. Same as you could look at the results after the Clinton/Rubin capital gains tax cut.

As for "the vast majority of gains since 2000 have gone to a very small minority of wealthiest Americans" let's have some numbers please. Are you saying that 99% of the gains went to 1% of the fat cats? That would be something! And we could debate it. I think your use of extreme terms here is another debating trick. I saw a lawyer on one of the news shows recently comlaining about the government's increased ability to wiretap terrorists. He said something like "For a minute increase in security we'lll turn into a complete police state."

So, you're skeptical of the trillion dollar hit. I'm not. I don't have the time on my hands tonight but maybe in a few days, if no one else posts it, I'll be glad to find some economic stats reminding you of how awful the economy was from 9/11/01 till the Bush tax cuts has some time to take effect. As for rebuilding...well don't get me started. But thanks to all the governmental meddling there exists today a gigantic monument to Al Qaeda in lower Manhattan.

[gonzomax]

http://www.csmonitor.com/2005/0614/p01s03-usec.htm Another Liberal witha an axe to grind,Alan Grennspan.

[Age Quod Agis]

http://www.csmonitor.com/2005/0614/p01s03-usec.htm Another Liberal witha an axe to grind,Alan Grennspan.Well, the "income disparity" argument doesn't really have any bearing on whether or not the economy as a whole is doing well. But since you brought it up, it sure looks like Greenspan hit on a Democratic talking point (in response to a Democrat's question). But that kind of wears off if you read past the first few paragraphs.The cause of this problem? Education, according to Greenspan. Specifically, high school education. US children test above world average levels at the 4th grade level, he noted. By the 12th grade, they do not. "We have to do something to prevent that from happening," said Greenspan.So the income disparity is not the result of Bush's tax cuts? Bummer, I guess. Why, it's almost as if this isn't Bush's fault at all. It's almost as if this problem existed even before Bush came into office.So are liberals overjoyed by these words from a man who is the high priest of capitalism? Not really, or at least not entirely.
<snip>
Inequality studies often ignore the wealth created by rising house prices, for instance - and homes represent the most substantial investment by many, if not most, Americans.

Nor do US workers necessarily perceive themselves on the losing end of a rigged capitalist game. A recent New York Times survey found that while 44 percent of respondents said they had a working-class childhood, only 35 percent said they were working class today, points out Bruce Bartlett, a senior fellow at the National Center for Policy Analysis. Eighteen percent said they grew up lower class, while only 7 percent said they remained in that societal segment.I'm not a big fan of executives voting themselves huge bonuses, but I'm even less excited about the idea of mandatory income redistribution. Especially since the system that we've got appears to be constantly improving most people's standard of living, and lives in general.

[DMC]

"Since the Bush tax cuts went into effect in 2003, the economic growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and '90s (3.3) . Today's unemployment rate (4.6 percent) is lower than the average for the '90s (5.8) - lower, in fact, than the average for the last 40 years (6.0)."Which Bush tax cut? Haven't there been three, and why aren't we therefore including 2001, 2002, etc?

[jshore]

There is no "cherry-picking" here at all. I think that's one term that liberals like to use to discredit results that don't fit their theories. In any event when this decade started Clinton was president, and he stayed president for another year and 20 days. Now if there was something magical about the inauguration that always had impacts on the economy, I'd say let's look at the numbers since 1/20/2001. But that's not the way it works. So Will (and others) chooses to start counting when the Bush tax cuts went into effect. Sounds fair to me. Same as you could look at the results after the Clinton/Rubin capital gains tax cut.

Look, this isn't rocket science here. The economy goes in cycles. When you look at the average rate of growth over a period long enough to include roughly a full cycle (i.e., including a recession), the average growth rate is going to be lower than if you choose a time period that is shorter and picked to correspond to a recovery phase of the economy. It is really as simple as that.

And, as DMC noted, Will et al. don't start when the first tax cuts went into effect but only when the last round of tax cuts went into effect. That conveniently gets them by the recession and a quite anemic phase of the economic recovery.

[msmith537]

If the unemployment rate were really that low, we'd expect to see upward pressure on wages, which is just not happening. So I have my doubts. I'm not saying anyone is cooking the books - just that there may be a lot of people who have given up.



Outsourcing has put some downward pressure on wages. Rising housing and health care costs have also put some downward pressure on real wages too (IOW, you may make more, but it buys less).

[jshore]

Look, this isn't rocket science here. The economy goes in cycles. When you look at the average rate of growth over a period long enough to include roughly a full cycle (i.e., including a recession), the average growth rate is going to be lower than if you choose a time period that is shorter and picked to correspond to a recovery phase of the economy. It is really as simple as that.


As a concrete example, using figures from the Bureau of Economic Analysis (http://bea.gov/bea/dn/nipaweb/SelectTable.asp?Popular=Y), one finds that the three year period of 1996-1999 had an average real GDP growth of 4.4%. That's the best 3-year period from the 1990s although you still beat the 3.5% figure if you choose the 3-year periods of 1994-1997, 1995-1998, and 1997-2000. Even during the 1970s, not generally remembered as an economic glory period, there were 3-year periods of >3.5% annual real GDP growth: 1970-1973, 1975-1978, and 1976-1979.

So, yes, over the last 3-years we have had good GDP growth, but certainly nothing unprecedented during previous economic cycles. Furthermore, this economic growth has been much less equally shared than during other periods. And, the cost of the "economic stimulus" that has presumably contributed to this growth to some degree has been enormous.

[gonzomax]

If the economy is growing and you are on the receiving end it is good. Assuming you dont care about your fellow Anmericans. But when the money goes straight to the very wealthy the rest of the country suffers. The unemployment rate is so innaccurate that it is meaningless. Check the want ads now and 7 years ago .
In the Detroit area our help wanted section was huge. There were usually 10 pages of engineering jobs. Now if one or 2 ads are there its a lot. The entire want ad section is 10% of the old days.
Because of a crackdown on immigration some farmers are complaining about not getting help. If they raise their rates the people will come. That would show the upward push on wages you describe.
Economics is not rocket science. Rocket science is predictable and mathematics works there. The economy is a vague pretend science. A new expert
comes out every year.

[pantom]

Eh. This recovery is unremarkable. Not great, but not terrible either.
As for cherry-picking the last three years, well, that's obvious political posturing, unless you're a convinced right-wing ideologue, in which case, good luck understanding the real world.
There is one area where the economy has done very well for not just the past three, but the past ten years, and that's productivity. If you take that, put it on a year-over-year basis, and measure, the performance since 1996 has been almost comparable to pre-1977, to wit:


1947-1977

-2 to -1 8
-1 to 0 13
0 to 1 24
1 to 2 32
2 to 3 38
3 to 4 40
4 to 5 21

1977-1995

-2 to -1 3
-1 to 0 10
0 to 1 18
1 to 2 19
2 to 3 15
3 to 4 8
4 to 5 4

1996 to the present

-2 to -1 0
-1 to 0 0
0 to 1 0
1 to 2 4
2 to 3 21
3 to 4 12
4 to 5 5


It's hard to realize just how remarkable the period since 1996 has been. We went through an amazing stretch from the latter half of 1997 through the latter half of 2004 when there wasn't a single quarter when the year-over-year number fell below +2%. That period encompassed the dot.com bubble, the 2001 recession, including the 9/11 attack, and the initial recovery from that recession. As you can see just from a glance at the last table, NO number has been reported below +1% for the past 10 years.
It was as if someone flipped a switch when 1996 began, and the economy changed completely since then. I have my ideas as to what it was, but it wasn't Dubya, obviously. Might've been something Clinton did, but I don't think so.
Point being, the Bush tax cuts haven't performed any weird miracles like the above on any front I can find, which means the debate ought to center around whether they're good or bad as public policy, since as economic policy their value is nil, and they quite obviously had no effect on the government's propensity to spend.
Which means they were obviously meant to redistribute income upwards (for some reason, that seems OK with folks who claim to be against income redistribution), so then the question becomes whether they were good, bad, or indifferent on that front.

Productivity numbers from the St Louis Fed. (http://research.stlouisfed.org/fred2/series/OPHPBS?&cid=1)

[kniz]

"Worst since Hoover" Carter came close with the prime rate hitting 21.5% in December, 1980 and inflation going over 10%. Unemployment went as high as 9%.

[Plan B]

"Worst since Hoover" Carter came close with the prime rate hitting 21.5% in December, 1980 and inflation going over 10%. Unemployment went as high as 9%.

Excellent point, I hadn't even thought about Carter recently, for obvious reasons. Getting back to the OP, Kerry is saying that this economy is worse that the 1979 economy. No one has come close to saying he's right about that. But I'm patient.........

[Themenin]

I am emphatically not an economist - so this is a question, not an affirmation.

Isn't the war in Iraq alone enough to put a rosy glow on US economic growth ?

What percentage of GNP is made up of war expenditure ?

[David Simmons]

Excellent point, I hadn't even thought about Carter recently, for obvious reasons. Getting back to the OP, Kerry is saying that this economy is worse that the 1979 economy. No one has come close to saying he's right about that. But I'm patient.........I'm not skilled in economics but I hear there are some holes. As to unemployment, for example, maybe a better measure would be workers' income per 100,000 workers. I've read that high pay jobs have been replaced by low pay jobs so the total income of workers is falling relative to the economy as measured by corporate profits, or corporate executive incomes.

The worldwide economy has put US workers in competition with those in Bangladesh, China, et al, and I wonder who will be the customers of the businesses when our standard of living for working people equals that in those countries.

[Plan B]

I am emphatically not an economist - so this is a question, not an affirmation.

Isn't the war in Iraq alone enough to put a rosy glow on US economic growth ?

What percentage of GNP is made up of war expenditure ?

There is a common misconception that war is good for business. It's not. Ask any of your friends who work in the financial markets. Fear of war always drives the stock market down.

[Plan B]

I'm not skilled in economics but I hear there are some holes. As to unemployment, for example, maybe a better measure would be workers' income per 100,000 workers. I've read that high pay jobs have been replaced by low pay jobs so the total income of workers is falling relative to the economy as measured by corporate profits, or corporate executive incomes.

The worldwide economy has put US workers in competition with those in Bangladesh, China, et al, and I wonder who will be the customers of the businesses when our standard of living for working people equals that in those countries.

American workers are doing great. Go to the link to the George Will article, cited in post #7. He addresses this very question.

And outsourcing has been going on in both directions for forever. And it's been adding to oour prosperity forever.

[DanBlather]

There is a common misconception that war is good for business. It's not. Ask any of your friends who work in the financial markets. Fear of war always drives the stock market down.It's complicated. Govt spending, particularly deficit spending, has a short term positive effect on the economy. Given a choice however,you are generally better off spending on non-military things. The multipler for defense spending is less than that for spending on doemestic infrastructure such as roads and bridges, education, research, etc.

[David Simmons]

American workers are doing great. Go to the link to the George Will article, cited in post #7. He addresses this very question.

And outsourcing has been going on in both directions for forever. And it's been adding to oour prosperity forever.I can't cite and statistics because I'm not really sure of what statistics to cite. However, when the only people Will cites are from the American Enterprise Institute, I'm not a bit surprised that the claim is that workers are doing great.

I'm curious about your statement that outsourcing on the scale that we are seeing now has been going on forever.

Will's statement Finally, today's widening income disparities will be partly self-correcting. Granted, income statistics show the increasing disadvantages of persons with education deficits. But that is the market saying -- shouting, really -- "Stay in school!" Over time the voice of the market is rational, credible and therefore a potent instrument for changing behaviorthat over time the economy is self-correcting might be true but the delay is long and people live and die now, not in some self-corrected future.

[DanBlather]

First off, it's a debate, not a pitting.

Second, Blaster Master, Voyager and AQA all mentioned the Great Depression in their responses to the OP. If today's economy was obviously not being compared to the Great Depression in any way, then none of them would have felt compelled to mention the Depression. That is proof that some English speakers would interpret it as a comparison.

Third, as was mentioned, the Depression didn't end when Hoover left office, it was in full swing for years after that point, so a comparison to the Depression is entirely consistent with the most literal possible meaning of his quote. If he didn't mean to compare it with the Depression, he should have taken a history lesson and picked a date after the Depression ended as his comparison point.I'd like to make a snarky riposte, but those are good points.

[gonzomax]

Waging an extremely expensive war while having a series of tax cuts ,is good economic polict in what economic theory? Thee huge defecits put us in financial risk. We are beholden to forign markets keeping this mess floating. It will end somewhere some time. Take the money and run is not a stabile system.
The potential is ruin.

[Sam Stone]

I'm no fan of deficits, but by historical standards today's deficit isn't that big. It's now projected to come in at 250 billion dollars (http://www.workpermit.com/news/2006_10_16/us/labor_market_statistics_correction.htm) for FY2006, way down from the earlier estimate of 318 billion. Why? Because government revenues are soaring.

So how does that stack up against historical averages? Have a look at this Deficit graph (http://traxel.com/deficit/deficit-constant-dollars.png), in 1996 dollars. 250 billion in 2006 dollars is something like 220 billion in 1996 dollars. It's been over 400 billion, and many times over 300 billion.

But a more critical number is the deficit as a percentage of GDP. Have a look at this chart: Deficit as % of GDP (http://traxel.com/deficit/deficit-percentage.png). The 40 year historical average for the deficit has been 2.3% of GDP. The current deficit is something like 1.9% of GDP, well under the historical average for the modern era. More importantly, the deficit is continuing to fall, while the economy is still growing at over 3%. So as a percentage of GDP, the deficit is dropping fast.

Look, I know Democrats pretty much have to say that the economy is horrible right now. What are they going to do, say it's great? But we all know they are lying through their teeth. There is no way in hell you can spin 3.5% growth, 6 million new jobs in 3 years, surging revenues, low inflation, unemployment near historical lows, the stock market at record highs, and low interest rates as anything other than great.

It's true that wages are stagnant on the lower end, but the reality is a lot more complex than a mere number. One of the reason wages are stagnant is because of competition from immigrants, both legal and illegal. They compete for jobs mainly at the lower end. But it's also true that the standard of living for the lower classes is improving, because they are getting improved benefits, and the goods that make up a large chunk of their disposable income are actually deflating. Food, consumer electronics, and thanks to Wal-Mart, household staples, drugs, clothing, books, toys, and just about anything else they sell. Wal-Mart alone is responsible for knocking several percentage points off the inflation rate, and all that savings goes straight to the poor and lower middle class.

I'll give you guys points for trying, through. It takes a lot of chutzpah to criticize the economy for having too many jobs available and too low an unemployement rate. Especially after liberal bitched about joblessness for the first few years of Bush's presidency.

This is not to give Bush credit for all of it, or even the majority of it. But there is no question that we are in a very good economy right now. My business pays very close attention to the economy, and our internal financial guys think we're doing awesome. And we set records in the last quarter for performance. And unlike governments, corporations don't blow sunshine up their asses and try to fool themselves - the numbers are important because they dictate what we can expect to sell, and therefore what we can afford to produce. Our hard-nosed green eyeshade types see a very good near future, and an excellent current economy.

[Themenin]

It's complicated. Govt spending, particularly deficit spending, has a short term positive effect on the economy. Given a choice however,you are generally better off spending on non-military things. The multipler for defense spending is less than that for spending on doemestic infrastructure such as roads and bridges, education, research, etc.
Without getting into the debate about whether war is ultimately an economic benefit or not (I think we agree - short term good, long term not so good), as I understand it the spending in Iraq is actually a substantial part of the GDP number per se, and thus the yearly growth figure.

That is to say, of the roughly 10 trillion USD GDP in 2005, some 100 billion is economic activity related to Iraq - absent this spending, the growth for the war years would be less than 3%.

War spending is economic activity, but it's hard to argue that this is quality economic growth. When the war ends, the growth dissappears and the debt remains.

Any real life economists to confirm or contest this take on things ?

[ralph124c]

I'd say things are OK right now, but this won't last for very long. the fact is, the USA is a nation built on debt: the trade deficit with China is > $185 billion this year. Most low income households have hegative net worth. Plus, the unfunded municipal and states pensions will kick in 5-10 years. Watch out!

[David Simmons]

But it's also true that the standard of living for the lower classes is improving, because they are getting improved benefits, :confused: Could you provide a list of these improved benefits that the lower income jobs provide?

[Sam Stone]

:confused: Could you provide a list of these improved benefits that the lower income jobs provide?

Sure. For example, Walmart provides health care benefits to over 1 million people. Walmart also matches an employee's 401(k) contributions up to 4% of their salary. Walmart also subsidizes day care for employees, and has a good training program. There are also performance bonuses.

[David Simmons]

Sure. For example, Walmart provides health care benefits to over 1 million people. Walmart also matches an employee's 401(k) contributions up to 4% of their salary. Walmart also subsidizes day care for employees, and has a good training program. There are also performance bonuses.It sounds like WAL*MART offers a health plan that only about 50% of its employees can afford. (http://www.ufcw.org/take_action/walmart_workers_campaign_info/facts_and_figures/walmartonbenefits.cfm) Employees make low enough wages that they can't live on what would be left after taking out the relatively high premiums. So they pay what they can on their own for medical services and let the public pay for what they can't afford. WAL*MART seems to have succeeded in externalizing yet another part of their costs.

And according to This site (http://money.cnn.com/2005/10/26/news/fortune500/walmart/) the company is in the process of shifting their expenses on health care and benefits around. The way I read it they are going to reduce their retirement costs by hiring more temps and the temps will be eligible for health insurance. However it looks to me like the cost of health insurance to the employee is high enough that the temps won't be able to afford it out of a temp's wage.

I don't know how WAL*MART is in Canada, since your labor rules might be different from those in the US, but here they act like a predator.

[Plan B]

I can't cite and statistics because I'm not really sure of what statistics to cite. However, when the only people Will cites are from the American Enterprise Institute, I'm not a bit surprised that the claim is that workers are doing great.

I'm curious about your statement that outsourcing on the scale that we are seeing now has been going on forever.


What exactly is your problem with the American Enterprise Institute? This sounds like another leftist debating trick. Instead of arguing the point just insult the messenger. So again, what exactly is wrong with the people at AEI? Please cite, or stop the ad hominem attacks. And, BTW, Will cites statistics in the article, not just opinions.

On the second point I never said that "outsourcing on the scale that we are seeing now has been going on forever." I said it's been going on forever. The economy has never existed on this scale before. So to say that "outsourcing on the scale that we are seeing now has been going on forever" would be as dumb as....as dumb as disqualifying anyone's credibility because they work for AEI.

[gonzomax]

I'm no fan of deficits, but by historical standards today's deficit isn't that big. It's now projected to come in at 250 billion dollars (http://www.workpermit.com/news/2006_10_16/us/labor_market_statistics_correction.htm) for FY2006, way down from the earlier estimate of 318 billion. Why? Because government revenues are soaring.

So how does that stack up against historical averages? Have a look at this Deficit graph (http://traxel.com/deficit/deficit-constant-dollars.png), in 1996 dollars. 250 billion in 2006 dollars is something like 220 billion in 1996 dollars. It's been over 400 billion, and many times over 300 billion.

But a more critical number is the deficit as a percentage of GDP. Have a look at this chart: Deficit as % of GDP (http://traxel.com/deficit/deficit-percentage.png). The 40 year historical average for the deficit has been 2.3% of GDP. The current deficit is something like 1.9% of GDP, well under the historical average for the modern era. More importantly, the deficit is continuing to fall, while the economy is still growing at over 3%. So as a percentage of GDP, the deficit is dropping fast.

Look, I know Democrats pretty much have to say that the economy is horrible right now. What are they going to do, say it's great? But we all know they are lying through their teeth. There is no way in hell you can spin 3.5% growth, 6 million new jobs in 3 years, surging revenues, low inflation, unemployment near historical lows, the stock market at record highs, and low interest rates as anything other than great.

It's true that wages are stagnant on the lower end, but the reality is a lot more complex than a mere number. One of the reason wages are stagnant is because of competition from immigrants, both legal and illegal. They compete for jobs mainly at the lower end. But it's also true that the standard of living for the lower classes is improving, because they are getting improved benefits, and the goods that make up a large chunk of their disposable income are actually deflating. Food, consumer electronics, and thanks to Wal-Mart, household staples, drugs, clothing, books, toys, and just about anything else they sell. Wal-Mart alone is responsible for knocking several percentage points off the inflation rate, and all that savings goes straight to the poor and lower middle class.

I'll give you guys points for trying, through. It takes a lot of chutzpah to criticize the economy for having too many jobs available and too low an unemployement rate. Especially after liberal bitched about joblessness for the first few years of Bush's presidency.

This is not to give Bush credit for all of it, or even the majority of it. But there is no question that we are in a very good economy right now. My business pays very close attention to the economy, and our internal financial guys think we're doing awesome. And we set records in the last quarter for performance. And unlike governments, corporations don't blow sunshine up their asses and try to fool themselves - the numbers are important because they dictate what we can expect to sell, and therefore what we can afford to produce. Our hard-nosed green eyeshade types see a very good near future, and an excellent current economy.
The creative book keveping wins again. The deficit is like unemployment rates. Under reported and coverered up. http://www.brillig.com/debt_clock/ The real numbers are unknown to the public.Corporations like Enron with the help of Arthur Anderson dont blow smoke. BS They all do.
There is no surpluss of jobs. if you needed one you wouldnt be so condecending. You would face the reality. Bankrupsies and forclosure increases are signs of a good economy?
PS I dont blame Bush for the under reporting. There has been a long precedence for it. He just elevates the art a few steps

[BrainGlutton]

What exactly is your problem with the American Enterprise Institute?

For one thing, it's staff (http://en.wikipedia.org/wiki/American_Enterprise_Institute#Personnel) includes Lynne Cheney, David Frum (the speechwriter who coined the dishonest phrase "Axis of Evil"), Newt Gingrich, Jeane Kirkpatrick, Michael Ledeen, Charles Murray (co-author of The Bell Curve), John Yoo (of the "unitary exectutive" theory) . . . Not names to inspire confidence.

[Plan B]

For one thing, it's staff (http://en.wikipedia.org/wiki/American_Enterprise_Institute#Personnel) includes Lynne Cheney, David Frum (the speechwriter who coined the dishonest phrase "Axis of Evil"), Newt Gingrich, Jeane Kirkpatrick, Michael Ledeen, Charles Murray (co-author of The Bell Curve), John Yoo (of the "unitary exectutive" theory) . . . Not names to inspire confidence.

Same BS as above. Please stop the ad hominem attacks and tell us what's wrong with each of those people. From what I know it sounds like the unifying principle is that they are conservative intellectuals, something that threatens the world view of people who think that conservatives can't read.

But more important, when you're done tell us what's wrong with the stats cited by George Will.

[Themenin]

Same BS as above. Please stop the ad hominem attacks and tell us what's wrong with each of those people. From what I know it sounds like the unifying principle is that they are conservative intellectuals, something that threatens the world view of people who think that conservatives can't read.

But more important, when you're done tell us what's wrong with the stats cited by George Will.

Well, I don't know anything about the quality of the AEI, but I still haven't seen any response to my comments regarding the growth /GDP figures. As best I can tell, current growth is largely constituted by increased government spending. To some degree this can be a healthy thing (as any socialist will tell you).

I'd like to see some real numbers if anyone has them, but from what I can glean, war spending, which I very roughly estimate at 1% of GDP is skewing the GDP figures for the last few years. If we discount Iraq dollars, growth is currently slower than the 80's and 90's.

Also, as other posters have mentioned, the averages are not calculated over comparable durations.

Overall, the indicators don't look that great to me - the growing double deficit, huge increase in the price of imported goods (oil) - but I'd be interested in hearing what any SDMB economists have to say.

[Plan B]

Overall, the indicators don't look that great to me - the growing double deficit, huge increase in the price of imported goods (oil) - but I'd be interested in hearing what any SDMB economists have to say.

Well, IANAE either but I can assure you that the federal deficit is not growing and the trade deficit has never been a problem in history and isn't now. As for the huge increase in oil costs, most economists will telll you that that's one thing that makes this economy even more impressive.

I'm also pretty sure that total military spending is at a relative low right now, certainly should be low compared to recent decades.

If you're losing sleep over the economy you might want to read the following article:

http://townhall.com/columnists/column.aspx?UrlTitle=the_dems_never_learn&ns=LawrenceKudlow&dt=09/02/2006&page=full&comments=true

[David Simmons]

What exactly is your problem with the American Enterprise Institute?AEI has a political agenda (http://www.sourcewatch.org/index.php?title=American_Enterprise_Institute) as one of the leading voices supporting the neocons that formulate US foreign policy, such as the Bush Doctrine. It has a vested interest in making the economic policies of the present administration look as good as possible.

All of the above is prefectly legitimate but it does raise questions in my mind as to their evenhanded analysis and presentation of economic data.

Is that dumb enough for you?

[mazinger_z]

I'd like to see some real numbers if anyone has them, but from what I can glean, war spending, which I very roughly estimate at 1% of GDP is skewing the GDP figures for the last few years. Though I do have an economics degree, I'm not a practicing economist (though I do read it often). Besides, Sam Stone typically beats me to these threads and I don't have anything useful to add. However, I will comment on this. Your use of cost, in relation to growth, is not the typical analysis one does to analyze an economy. When you use this statement, for instance: If we discount Iraq dollars, growth is currently slower than the 80's and 90's. Why exactly are you discouting Iraq dollars? Discounting them against what? You need some sort of inflationary measure or basket of goods to do the discounting. However, no one has made that claim or provided that resource for analysis.

Furthermore, back to my first point, what you are asking essentially is: "If I spend X, how does that make Y grow?" I can totally see where you are coming from, but the economic indicators that are typically trotted out in these threads are measurements of som degree to be measured against each other. What you're asking for is something found in finance/investment, i.e. "If I put $100 into my mutual fund, what is my expected return for the year?"

You're asking about a cost, and that's just it, it's a cost. The military cost includes all costs (paid, as in funds sent to). So, cost, therefore, is a function of budget, as in, how much money is being sent in, or out.

GDP is not a budgetary number. Well, not in the OMB sense. GDP isn't the amount of money the country has on hand, but an agreed upon economic indicator that measures the final market value of all goods and services in the economy.

So, to answer your question, there is some expenditure by the US government that makes its way into the GDP, but that amount is going to have components that aren't measured into the fair market value of goods and services. So, economists use goverment spending as a separate component in GDP.

The formula for GDP = consumption + investment + government spending + (exports − imports). Note, it doesn't say military spending, which would be a subset of government spending. If you're assuming 1% military spending, then, by the very definition of GDP, military spending is very small compared to the overall growth of the economy. That is, unless of course, you meant that of the GDP growth (percentage wise), 1% is from military spending. However, no economist breaks down percent growth into the components (like the way I just laid out above).

[Age Quod Agis]

If the economy is growing and you are on the receiving end it is good. Assuming you dont care about your fellow Anmericans.Ahhh, yes. If you think the economy is doing well, then you're selfish and unpatriotic. Right. :rolleyes: But when the money goes straight to the very wealthy the rest of the country suffers.It doesn't go straight to the very wealthy. I thought we'd already established that. If not, I'll need a cite. Because even your Greenspan article says that the money is spread out to more than the very wealthy.The unemployment rate is so innaccurate that it is meaningless.What's inaccurate about it? Can you please explain?Check the want ads now and 7 years ago .
In the Detroit area our help wanted section was huge. There were usually 10 pages of engineering jobs. Now if one or 2 ads are there its a lot. The entire want ad section is 10% of the old days. I'd ask for a cite, but the status of the want ads in Detroit doesn't really show anything about the economy as a whole.

First of all, I seriously doubt that there are fewer want ads now than 7 years ago.

Second, even if there were fewer want ads, that's probably at least in part due to the growth of on-line listings. Did you include Monster.com, etc., in your calculation of want ads?

Third, even if there are fewer jobs in Detroit than 7 years ago -- which I have not yet seen any evidence of -- it's probably unfair to judge the state of the economy as a whole by looking at Detroit's unemployment rate. In fact, Detroit's unemployment rate is one of the worst in the nation (http://www.bls.gov/news.release/metro.nr0.htm). The national economy should be judged by looking at the national economic statistics and indicators. Because of a crackdown on immigration some farmers are complaining about not getting help. If they raise their rates the people will come. That would show the upward push on wages you describe.I thought higher wages was a good thing. Sounds to me like the economy is working in the manner it's supposed to work.Economics is not rocket science. Rocket science is predictable and mathematics works there. The economy is a vague pretend science. A new expert
comes out every year.I don't mean to be flip, but I don't understand your point here. Are you suggesting that there's no way to tell whether or not the economy is doing well? If so, then on what are you basing your judgment that the economy is not doing well?

[Themenin]

Why exactly are you discouting Iraq dollars? Discounting them against what?... That is, unless of course, you meant that of the GDP growth (percentage wise), 1% is from military spending. However, no economist breaks down percent growth into the components (like the way I just laid out above).

Careless wording on my part. I should have said 'excluding' not 'discounting' (you're right, I would have no idea what multiplier to use). What I'm saying is that (pulling numbers out of my ass here) 2002 GDP is 10 trillion, 2003 GDP is 10.3 trillion growth is 3%

But the 10.3 trillion includes 100 billion one time war expenditure, which creates no long term benefit and does show up in the other column as debt which will need servicing in future years. Although the war does create some real economic activity, is it fair to trumpet 3% growth, when 1/3 of the apparent growth is attributable to the war, and not only not sustainable, but will be creating debt pressure in the future.

I believe this is one of the usual criticisms of using GDP to measure growth, but I'm not too sure about the numbers involved.

[DMC]

What exactly is your problem with the American Enterprise Institute?Other than that they are a partisan outfit who will manipulate numbers to suit their agenda? Not very much.

Here's the kind of crap that they pull. In the article that George Will references, one of their statements used to defend Bush's economic policies is: The data also reject the view that we are evolving toward an economy that is less friendly toward the middle class. Indeed, the rate at which consumption by the middle class is increasing has accelerated in recent years. The average annual consumption growth for the middle class was less than 1 percent in the period from 1990 to 1994, rose to 1.5 percent in the period from 1995 to 1999, and jumped to more than 2 percent in the period from 2000 to 2005. The middle class is even doing better than the upper crust: The growth of their consumption expenditures exceeded the growth rate in the highest income category between 2000 and 2005. Consumption is becoming more equal across these income classes.They are attempting to show that the numbers are far better under Bush than the final years under Clinton. For those who pay close attention to the bolded part, you'll notice something a bit odd. That's right, Bush wasn't president in 2000.

Now, let's look at the actual consumption-change-percentage numbers used by the authors:

2000 2001 2002 2003 2004 2005
4.94% 0.59% 2.12% -0.83% 3.43% 2.00%
Oops. It seems they forgot to give 2000 to Bill and gave it to Bush. Thanks to that extremely high consumption number courtesy of Bubba, we do indeed average slight over 2% (2.04%). Of course, on the opposite end, they took that big number away from Bubba to get the 1.5% they use in comparison to Bush, which if added in should increase the final Bubba numbers by almost a percentage point. Now, we take that number away from the W, and we get 1.46%. That's even lower than the falsified number that they attributed to Clinton, and far lower than the actual number under Clinton.

Is it still an ad hominem to call them lying sacks of shit? How about cherry-picking, Scaife-fellating dickweeds?

[Plan B]

Other than that they are a partisan outfit who will manipulate numbers to suit their agenda? Not very much.

Here's the kind of crap that they pull. In the article that George Will references, one of their statements used to defend Bush's economic policies is: They are attempting to show that the numbers are far better under Bush than the final years under Clinton. For those who pay close attention to the bolded part, you'll notice something a bit odd. That's right, Bush wasn't president in 2000.

Now, let's look at the actual consumption-change-percentage numbers used by the authors:

2000 2001 2002 2003 2004 2005
4.94% 0.59% 2.12% -0.83% 3.43% 2.00%
Oops. It seems they forgot to give 2000 to Bill and gave it to Bush. Thanks to that extremely high consumption number courtesy of Bubba, we do indeed average slight over 2% (2.04%). Of course, on the opposite end, they took that big number away from Bubba to get the 1.5% they use in comparison to Bush, which if added in should increase the final Bubba numbers by almost a percentage point. Now, we take that number away from the W, and we get 1.46%. That's even lower than the falsified number that they attributed to Clinton, and far lower than the actual number under Clinton.

Is it still an ad hominem to call them lying sacks of shit? How about cherry-picking, Scaife-fellating dickweeds?

Well you certainly made the point that the liberals are the more compassionate group this year. I'm touched by how respectful you are of people who disagree with you. Just more stifling of dissent, if you ask me. And no doubt this is the kind of stuff that the Republicans love to circulate at this time of year to get the base to keep things in perspective. "Sure, stay home on Election Day. Just don't come crying to me when people like this are in power."

Anyway, I'm not sure if your post is cherry-picking or you actually failed to read the title of the article. It wasn't about Bush vs. Clinton. It was about trends in income growth. I don't think the article mentions Clinton even once and only mentions Bush in the first sentence, as a kind of attention grabbing tactic. The authors are making the point that consumption is growing, which means that people are consuming more, which is a good thing. And by your admission they give credit to the Clinton years. But it's not about Democrat vs Rebublican administrations. They're just saying that Americans are doing better, which we are. So there's absolutely nothing wrong or dishonest with grouping 2000 with 2001 and 2002.

I will grant you one point though. They may have been trying to make the point that growth is accelerating. But that's what social scientists do. As we've proven already, it's not rocket science, it's much more complex.

BTW, thanks for the stimulus to go to the source. I hadn't been to the AEI web site in months and had forgotten how much scholarly and readable info they make available for free. (Hmmm, maybe that's where Sam Stone gets his stuff.) It must have taken a lot of work to find something that appeared to be inaccurate.

[DMC]

Well you certainly made the point that the liberals are the more compassionate group this year.When the people I vote for start indiscriminately killing people, feel free to question my compassion.I'm touched by how respectful you are of people who disagree with you.I'm perfectly respectful of people who disagree with me. Hell, Sam Stone and I probably haven't agreed on anything other than that people shouldn't eat puppies, but I doubt he'd agree with you on whether that has any affect on my respect for him. I have absolutely zero respect for FoS funded mouthpieces posing as experts, on the other hand.Just more stifling of dissent, if you ask me.The day I become a mod (fat chance) and delete your posts, then you can accuse me of stifling dissent. Hell, I welcome dissent, especially when it consists of claims based on bogus numbers.And no doubt this is the kind of stuff that the Republicans love to circulate at this time of year to get the base to keep things in perspective. "Sure, stay home on Election Day. Just don't come crying to me when people like this are in power."Waah.

Anyway, I'm not sure if your post is cherry-picking or you actually failed to read the title of the article.I read it far closer than you appeared to have.It wasn't about Bush vs. Clinton.Sure it was. You need to learn the code words, such as "populist", or be familiar with the author's other works. He's a prolific little bugger, and quite odd for an economist, has a hard time writing an article that isn't political in nature, but hey that's what FoS pays him to write.It was about trends in income growth.The trends aren't what you seem to think they are.I don't think the article mentions Clinton even once and only mentions Bush in the first sentence, as a kind of attention grabbing tactic. The authors are making the point that consumption is growing, which means that people are consuming more, which is a good thing.Except that it's not growing in the manner they'd like for you to believe, nor for the reasons they want you to believe.And by your admission they give credit to the Clinton years.No, by my admission they take one of Clinton's best years for consumption and try to get the reader to attribute it to Bush. Seems to have worked on you. But it's not about Democrat vs Rebublican administrations. They're just saying that Americans are doing better, which we are. So there's absolutely nothing wrong or dishonest with grouping 2000 with 2001 and 2002.Of course there is. They use numbers from 2001 forward when discussing overall consumption, but knowing that they'll get called on who is doing the consuming, they decide to focus on the middle class. When they make that switch, they start in 2000 instead, in order to get numbers that actually look decent on average.

I will grant you one point though. They may have been trying to make the point that growth is accelerating. But that's what social scientists do. As we've proven already, it's not rocket science, it's much more complex.Here's a little poor man's graph of the numbers they used (sorry, but us populists can afford real graphs):
2000 2001 2002 2003 2004 2005

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I don't see much growth. Hell, the best percentage increase he's had was due to having an exceptionally crappy year before that. By the same token, I look like Brad Pitt when standing next to Quasimodo.BTW, thanks for the stimulus to go to the source. I hadn't been to the AEI web site in months and had forgotten how much scholarly and readable info they make available for free. (Hmmm, maybe that's where Sam Stone gets his stuff.) It must have taken a lot of work to find something that appeared to be inaccurate.Any time. If you'd like more web-sites that will tell you what you want to hear, might I recommend you look for any "think-tank" that is funded by Scaife, Bradley, Koch, Olin, Coors, Carthage, etc (usually all of them together). You'll find them all quite scholarly and readable.

By the way, you never did tell us your take on the effects of the 2001 and 2002 tax cuts. You just used 2003. How's that response coming along?

[pantom]

Themenin: I did a bit of checking around about the question of how much of the recent growth is attributable to defense, and it's a piece, a significant piece in a couple of years, but not the whole thing or even close by any stretch of the imagination.
Raw figures below:

Year GDP Defense GDP Chg Def Chg DC*M % No M % With M
2000 9,817.0 294.5
2001 10,128.0 305.5 311.0 11.0 16.94 0.035 0.054
2002 10,469.6 348.6 341.6 43.1 66.374 0.126 0.194
2003 10,960.8 404.9 491.2 56.3 86.702 0.115 0.177
2004 11,712.5 453.7 751.7 48.8 75.1212 0.065 0.100
2005 12,455.8 450.6 743.3 -3.1 -4.7432 -0.004 -0.006


To explain, the GDP (column 2) is in current dollars, since that's how the defense budget (column 3) is quoted. Column 4 is the change in GDP from one year to the next, column 5 is the change in defense spending (ex Iraq & Afghanistan) from one year to the next, column 6 is the amount times a multiplier - how much the additional expenditure can be expected to increase overall economic activity, which instead of pulling out of my ass, I pulled out of this guy's, 'cause he sounded like he had a clue, (http://www.albany.edu/~renshaw/leading/ess01.html) (multiplier used is 1.54, for all you geeks) column 7 is the percent that the increase in defense was of the increase in GDP without the multiplier, and finally column 8 is that percent with the multiplier.
You can disregard 2005, since the defense figure for that year is an estimate, and is obviously, um, erm, not reflective of reality. (CDI (http://www.cdi.org/) guesstimates 2005 at 495 bil or so, which may or may not be more reflective of reality.)
So anyway, 2002, not surprisingly, is the year when defense accounted for the most in terms of its percentage contribution to GDP. Note as well that the figure would be higher by a lot if we threw in Iraq and Afghanistan, both of which substantially increase the budget. My guess is that you could probably account for 20% of the change in GDP in both 2002 and 2003, at minimum, with expenditures for these wars included. All of the post-2001 figures are substantially higher than the 5.4%, at most, that they accounted for in the last Clinton year of 2001; Bush's first budget is the 2002 one (this goes by fiscal, not calendar, years).
Which is my sweet, subtle way of pointing out that Clinton did it without the use of steroids. In this little comparison, sports fans, Clinton = Aaron, Dubya = Bonds.

GDP figures from the BEA. (http://bea.gov/bea/dn/home/gdp.htm)
Budget figures from the GPO. (http://www.gpoaccess.gov/usbudget/fy05/hist.html)

[DMC]

Here's a little poor man's graph of the numbers they used (sorry, but us populists can afford real graphs)That should be "can't afford real graphs", of course.

[Themenin]

Themenin: I did a bit of checking around about the question of how much of the recent growth is attributable to defense, and it's a piece, a significant piece in a couple of years, but not the whole thing or even close by any stretch of the imagination.Kudos for the numbers work.

I dug up a MarketWatch article which ballparks the Iraq bonanza at +0.5% annual

A rough, back-of the-envelope calculation shows that the war has boosted U.S. gross domestic product by about half a percentage point annually since it began in March 2003.http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BA7DB7B95%2D7C58%2D41FB%2DAF89%2D1F65136D670E%7D&link=&keyword=iraq%20gdp

Although the war has stimulated the defense industry, I think it's safe to say that the 0.5% is mostly being poured into a bottomless hole, and in economic terms is mainly feeding the deficit.

[Monocracy]

I'm no fan of deficits, but by historical standards today's deficit isn't that big. It's now projected to come in at 250 billion dollars (http://www.workpermit.com/news/2006_10_16/us/labor_market_statistics_correction.htm) for FY2006, way down from the earlier estimate of 318 billion. Why? Because government revenues are soaring.No, that is not why. The public deficit is down because intragovernmental borrowing is up. The total deficit has been hovering around the same mark. While the public deficit went from $380 B to $290 B to $240 B, the total deficit went from $600 B to $550 B to $570 B. So, while borrowing has gone down a little bit, especially when you factor in inflation or GDP, it's not going down at the pace the administration is claiming.

cite: http://www.publicdebt.treas.gov/opd/opdpdodt.htm

At the current pace, when Social Security starts calling back its loans, the government is going to be in big financial trouble.


So how does that stack up against historical averages? Have a look at this Deficit graph (http://traxel.com/deficit/deficit-constant-dollars.png), in 1996 dollars. 250 billion in 2006 dollars is something like 220 billion in 1996 dollars. It's been over 400 billion, and many times over 300 billion.The chart seems to hurt your arguments more than help them. Bush took the deficit up to WWII levels, and now it's supposed to be good because he has them down to Reagan levels? And check out the years between 1992 and 2000. A $300 B deficit gradually gets taken town to nothing and then to a small surplus. Too bad we couldn't have another administration like that.

[Damuri Ajashi]

Further, I'm not convinced increasing the minimum wage will do any good.

Pelosi's first 100 hours seem like a reasonable place to start.

Minimum wage increases are inflationary but the inflation is spread throughout society so its good for the people getting the minimum wage increase and not as so good for anyone who was making just above minimum wage right before the minimum wage increase. For anyone making much more than minimum wage (say twice minimum wage or better), the inflationary effect is probably going to be negligible.

The economy as a whole may be doing better but there have been recent reports that the vast majority of Americans are seeing a reduction in their inflation adjusted income and that the vast majority of the prosperity is being enjoyed by a small sliver of society. A much larger segment of society is temping or working part-time or working at marginal jobs. None of these people have medical benefits or retirement plans, they are living hand to mouth. Maybe that is just the result of a globalizing economy and the standard of living of the bulk of our nation is slowly being transferred from $40,000/year Americans to $4000/year Chinese. Maybe its just cyclical or maybe it was always this way and we have just forgotten. The fact remains that the bulk of America is not better of today (on an inflation adjusted basis) than they were in 2000. Sure there was a terrorist attack but that was 5 years ago and there has been over 3 trillion dollars of deficit spending since then. You'd think that 3 trillion dollars of deficit spending might be enough to take care of any lost economic activity from 9/11 and Katrina.

[Plan B]

The economy as a whole may be doing better but there have been recent reports that the vast majority of Americans are seeing a reduction in their inflation adjusted income and that the vast majority of the prosperity is being enjoyed by a small sliver of society.

Cite, please?

[Damuri Ajashi]

And taxes -- particularly those paid by middle-class families with children -- have declined substantially.

Taxes went down for everyone they just went down more for the wealthy than the middle class at the expense of a higher national debt (it was under 6 trillion in 2000, its almost 9 trillion today, a trillion here a trillion there and pretty soon we're talking about real money).

Regarding Medicare, I thought the problem was that Medicare (in its role as an insurer) was not allowed to use its market power to negotiate lower drug prices with phamaceutical companies like the national plans in Canada and other places with national health plans.

[DMC]

Cite, please?http://news.bbc.co.uk/1/hi/business/5303590.stm
http://www.economist.com/world/displaystory.cfm?story_id=7055911
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2006/02/23/financial/f065728S07.DTL

[Damuri Ajashi]

I'm skeptical of this "trillion dollar hit" claim. Sure, I imagine that 9/11 and what followed had some negative impacts on GDP...but I imagine it had positive effects too. Remember that GDP is an imperfect measure and, as such, things like disasters and wars can inflate it as money gets spent rebuilding or manufacturing weapons and so forth.

The economic effects of Katrina were larger than the effects of 9/11 (unless you include the costs of the Department of Homeland Security, additional costs of security to the private sector and the Iraq War, which doesn't really seem fair). In all, if you carve out things like the cost of additional security at the airports (but not the cost of laid off airline workers), if you carve out the war in Iraq, the direct and indirect cost of Katrina and 9/11 put together do not equal 1 trillion dollars, it is only with the inclusion of the war in Iraq and the additional security costs that were prompted by 9/11 that would push us over 1 trillion. The way I think of it is like this. We get in a car accident with a big SUV and we have airbags installed on our car and we shoot some guy down the street I don't like who happens to drive an SUV, the cost of repairing the car and loss of use of the car are all costs of the accident but getting the additional airbags and the cost of shooting some guy down the street I don't like but who drives an SUV are not costs of the accident.

[Damuri Ajashi]

Where do I start?

There is no "cherry-picking" here at all. I think that's one term that liberals like to use to discredit results that don't fit their theories. In any event when this decade started Clinton was president, and he stayed president for another year and 20 days. Now if there was something magical about the inauguration that always had impacts on the economy, I'd say let's look at the numbers since 1/20/2001. But that's not the way it works. So Will (and others) chooses to start counting when the Bush tax cuts went into effect. Sounds fair to me. Same as you could look at the results after the Clinton/Rubin capital gains tax cut.

As for "the vast majority of gains since 2000 have gone to a very small minority of wealthiest Americans" let's have some numbers please. Are you saying that 99% of the gains went to 1% of the fat cats? That would be something! And we could debate it. I think your use of extreme terms here is another debating trick. I saw a lawyer on one of the news shows recently comlaining about the government's increased ability to wiretap terrorists. He said something like "For a minute increase in security we'lll turn into a complete police state."

So, you're skeptical of the trillion dollar hit. I'm not. I don't have the time on my hands tonight but maybe in a few days, if no one else posts it, I'll be glad to find some economic stats reminding you of how awful the economy was from 9/11/01 till the Bush tax cuts has some time to take effect. As for rebuilding...well don't get me started. But thanks to all the governmental meddling there exists today a gigantic monument to Al Qaeda in lower Manhattan.

You know that the first round of Bush tax cuts were in June 2001, right? It affected all income earned from January 1 2001 forward.

There were additional tax cuts since then. Why pick the 2003 tax cuts as a starting point? I mean the 2001 cuts were the ones that reduced the tax rate and the estate tax. Why not start with the date when his first (and largest) tax cuts went into effect?

The top 1% receives about 40% of all tax savings under the combined Bush tax cuts and by 2010 they will be receiveing more than half of the tax savings.

I believe the cost of 9/11 is only 1 trillion dollars if you include the cost of the war in Iraq and the increased overhead costs that people are investing in security.

[Damuri Ajashi]

Excellent point, I hadn't even thought about Carter recently, for obvious reasons. Getting back to the OP, Kerry is saying that this economy is worse that the 1979 economy. No one has come close to saying he's right about that. But I'm patient.........

Well, I guess if you look at the economy from when Bush took office until when the speech was made, it seems like it did worse than the Carter administration as a whole. Of course some of this was due to 9/11 but lets not forget that there were a host of other economic factors (also out of bush's control) that aggravated the situation: the dotcom bust, a bunch of large bankruptcies (Enron, Worldcom, etc.), just the plain old business cycle. I guess my point is that Bush is about as responsible for the economic growth today as he was for the economic crunch of yesteryear. What he may be responsible for (and even this is arguable), is the increasing disparity in income.

[jshore]

Taxes went down for everyone they just went down more for the wealthy than the middle class at the expense of a higher national debt (it was under 6 trillion in 2000, its almost 9 trillion today, a trillion here a trillion there and pretty soon we're talking about real money).

An analogy might be useful here: Let's say that I borrowed $1000 off of each person's credit card, gave most people $500 of it back in cash, except for the richest 2% who I gave $25500 back...and then I claimed that everyone had benefitted. That would be, roughly speaking, what has been done here.

(Okay, the reality is slightly more complicated since the tax reductions varied according to a lot of factors, the money wasn't really borrowed from each person's credit card but rather our collective credit card so that it is still somewhat ill-defined who will have to pay it off as it will depend on future tax policies, and some people believe that the lower tax revenues would restrain future government spending [although it is hard to see much evidence of this at least as of yet]...but you get the basic idea.)

[Damuri Ajashi]

The multipler for defense spending is less than that for spending on doemestic infrastructure such as roads and bridges, education, research, etc.

The multiplier is certainly smaller when it is spent on FOREIGN infrastructure.

[jshore]

The way I think of it is like this. We get in a car accident with a big SUV and we have airbags installed on our car and we shoot some guy down the street I don't like who happens to drive an SUV, the cost of repairing the car and loss of use of the car are all costs of the accident but getting the additional airbags and the cost of shooting some guy down the street I don't like but who drives an SUV are not costs of the accident.

But it is even worse than that because one has to realize that most of these costs (namely, repairing the car, getting the additional airbags, and shooting the guy down the street) are going to show up as contributions to the GDP! The loss of the use of the car is not going to directly be counted against the GDP except to the extent that such loss of use reduces your economic output.

So, my point is that there are certainly some costs of 9/11, such as a (mainly temporary) reduction in air travel, that will lower the GDP but many of the other costs (such as rebuilding and launching useless wars against unrelated people) will actually raise it.

[Damuri Ajashi]

Cite, please?

Don't have one but there were several threads going a few weeks (months?) back about how per capita income of the middle class has actually dropped half a percent in inflation adjusted dollars sometime in the last few years despite increasing overall GDP.

[mazinger_z]

But it is even worse than that because one has to realize that most of these costs (namely, repairing the car, getting the additional airbags, and shooting the guy down the street) are going to show up as contributions to the GDP! The loss of the use of the car is not going to directly be counted against the GDP except to the extent that such loss of use reduces your economic output. All simplifications aside, you do cite a valid criticism of GDP, but the fact of the matter remains is that the calculation and use of GDP has remained consistent ever year since its inception and is as universally recognized a term as anyone can ask for.

Remember, these economic indicators are objective statistical values given for a very complex set of data. Therefore, making statements like, "Worst economy since HH" is as misguided a statement as "Bush tax cuts have created this prosperity." Delving so deep into the numbers, to explain any type of rise or fall or miscalculation is nothing more than Monday morning armchair quartebacking. Trying to figure out the value of a tax cut (a non-economic indicator) and its impact on the economy is as arduous a fruitless exercise as trying to figure out military spending (a budgetary cost) effect on the net increase to GDP.

Back to the OP, compared to today's numbers, John Kerry statement in 2004 means he is full of shit, both on a straight up comparrison as well as a relative valuation compared to the period before it (in the case of HH, that would be 1929-1932).

If I want to get in on the Monday morning fun, I would say that Kerry is even more full of shit than Bush saying his tax cuts created a propserous economy.

[DMC]

All simplifications aside, you do cite a valid criticism of GDP, but the fact of the matter remains is that the calculation and use of GDP has remained consistent ever year since its inception and is as universally recognized a term as anyone can ask for.While that's true, it doesn't change the fact that partisans will include or exclude off-budget numbers as it fits their needs, so deficit as a percentage of the GDP (which has been trotted out here) can become next to worthless as a measuring tool.If I want to get in on the Monday morning fun, I would say that Kerry is even more full of shit than Bush saying his tax cuts created a propserous economy.Absolutely no disagreement from me on this one. Both are full of shit, but in this case, Kerry is more so.

[Damuri Ajashi]

If I want to get in on the Monday morning fun, I would say that Kerry is even more full of shit than Bush saying his tax cuts created a propserous economy.

Kerry really should have stuck to "Bush lied to us about Iraq but now that we are there, I am the man to get us out not the shitbag we have for president right now" noone cared about the economy in 2004.

All simplifications aside, you do cite a valid criticism of GDP, but the fact of the matter remains is that the calculation and use of GDP has remained consistent ever year since its inception and is as universally recognized a term as anyone can ask for.

GDP is a valid number it just means that we have to also keep an eye on deficits.